What should be included in an individual indemnification contract?
Among the more important protections to consider are things such as mandatory advancement of your legal bills. You may want to retain the right to choose your own attorney, rather than having your company select the lawyer who will represent you. Understanding how your agreement is affected by a change in control of the company is also important. The process through which you make a claim to indemnification should also be explored. At what point will the company advance defense costs? How often? Another critical concept is known as “presumptive indemnification.” This is analogous to the idea of innocent until proven guilty. With this provision, companies, in effect, stick by directors until they go to court and all of their appeals are exhausted. You should consult with your attorney about specific terms and provisions. In what situations is indemnification important for directors and officers? If you have good D&O insurance —which every director and officer should insist upon —you can
